Deciphering takeover premiums: what resources of target firms drive takeover premiums?

Although paying takeover premiums to target firms is often identified as a key factor contributing to the frequent failures observed in mergers and acquisitions (M&As), existing studies have offered limited insights into the specific drivers behind takeover premiums. Therefore, this study adopts the lens of the resource-based view (RBV) to investigate the target firms’ resources that lead acquirers to offer takeover premiums. By analyzing 660 Chinese M&As, our findings indicate that the marketing and technology resources within target firms increase takeover premiums. In contrast, product and human resources do not significantly impact the takeover premiums.